RIYADH: As Gulf countries struggle with the consequences of the US assault on Iran, Kuwait’s government plans to borrow from the nation’s sovereign wealth fund, which has more than $1 trillion in assets, to bolster public finances.
A 1976 legislation governing the Future Generations Reserve Fund, a sovereign wealth fund overseen by the Kuwait Investment Authority, is amended by the new decree, which is intended to support the general reserve fund.
A portion of Kuwait’s wealth is intended to be preserved and increased for future generations through the Future Generations Fund, a long-term sovereign savings fund. It provides Kuwait with a financial safety net outside of its reliance on oil earnings by investing abroad in a variety of assets.
When Iraq attacked and controlled Kuwait for roughly seven months in 1990, Kuwait initially used the fund, which was created as a savings vehicle for the post-oil period. New legislative power is needed to make withdrawals from the fund.
Any loan taken out of the fund must be reimbursed as soon as the state budget records a surplus, with repayment given priority, according to the decree published in the official gazette on September 1. Among other restrictions placed on the borrowing agreement, it also specifies that the debt cannot be cancelled off under any circumstances, with the exception of powers granted by new legislation.
Also Read:
Russia-Japan Relations in Focus After Putin’s Kuril Islands Visit
